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Britain to enjoy biggest boom year since 1948, says Barclays chief

Simon English
·2-min read
Amanda Staveley legal action (PA Wire)
Amanda Staveley legal action (PA Wire)

Barclays profits soared in the first quarter, leaving chief executive Jes Staley predicting that the UK economy will enjoy its best year since 1948.

Profit in the first quarter rose from £600 million a year ago to £1.7 billion.

More notably, Barclays is forecasting economic growth this year of between 6 and 6.5%, the best return since Clement Attlee was Prime Minister.

“Households have about £200 billion in excess savings on bank balance sheets. That will clearly be an engine for growth,” he told the Standard.

Barclay’s own data shows consumer spending in April boomed 70% in April compared to a year ago.

“The government will maintain furlough until it can keep employment at this level, I think. It is a pretty upbeat scenario.”

He added: “Some years down the road there may be a cheque coming, but right now it looks pretty robust.”

Credit impairment charges were just £55 million, compared to £2.1 billion a year ago, a sign of how fast the economy is bouncing back, and perhaps how well consumers and government dealt with the pandemic, at least financially.

Barclays is different from other UK rivals such at NatWest and Lloyds, in that it retains a strong investment banking franchise.

The Corporate and Investment Bank, the CIB, saw income slip 1% to £3.6 billion.

Richard Hunter at interactive investor said: “This may have been a record quarterly profit, but under the bonnet the situation is not as straightforward.

In terms of actual trading, income fell and costs rose, with the inevitable effect of a worsening cost/income ratio, up to 61% from 52% the previous year.”

Despite Staley’s upbeat tone, the bank took a more cautious approach than rivals to bad debt provisions.

HSBC, Lloyds and NatWest all this week clawed back some of the billions set aside to cover Covid, which Barclays did not.

Barclays shares were barely above £1 a year ago. Today they slipped 6% to 177p.

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